Several world leaders are under fire after a consortium of journalists on Sunday revealed their ties to a Panamanian law firm that helped some of the world's richest and most powerful people conceal their wealth through tax havens and offshore companies.
The revelations are based on the "Panama Papers," 11.5 million leaked documents tied to the Panamanian law firm Mossack Fonseca.
Among the prominent figures listed in the documents are Iceland's Prime Minister Sigmundur David Gunnlaugsson -- who has now stepped down -- and Ukraine's President Petro Poroshenko. British Prime Minister David Cameron, Pakistan's Prime Minister Nawaz Sharif and Russian President Vladimir Putin are also connected to the leak through associates or family members. Putin's friends, the documents show, have amassed over $2 billion in offshore holdings.
German newspaper Suddeutsche Zeitung first obtained the documents from an anonymous source over a year ago, and then joined with the International Consortium of Investigative Journalists to analyze the immense amount of data. While reports on the exact ties between prominent figures and Mossack Fonseca continue to be released, the ICIJ has revealed that in total, over 140 public officials and politicians' offshore holdings are included in the documents.
As the reporters working on the Panama Papers are careful to note, there are a number of legitimate reasons to have offshore holdings. Journalists allege, however, that the documents clearly show a number of instances in which there is the appearance of corruption, tax evasion and money laundering.
What's The Biggest Implication Of The Leak?
It's still too soon to tell what the most important consequence will be from the leak, but the biggest immediate waves are being felt in Iceland, where Prime Minister Gunnlaugsson has resigned over the leak.
Documents from Mossack Fonseca revealed that Gunnlaugsson and his wife founded an offshore company, Wintris Inc., that was based in the British Virgin Islands. The revelation is especially notable given Iceland's recent history, in which the country was lauded for cracking down on bankers and executives whose market manipulations contributed to the collapse of the nation's economy in 2008.
The documents allege the Gunnlaugssons' offshore company owned bonds in Iceland's failed banks, and Gunnlaugsson was involved in negotiations as prime minister that may have affected the worth of those bonds.
Gunnlaugsson reportedly sold his share in Wintris to his wife in 2009 for $1, and failed to ever declare his stake in the offshore company.
A widely shared interview with Gunnlaugsson by Swedish broadcaster SVT released on Sunday further added to the scandal. The video shows Gunnlaugsson becoming visibly flustered and uncomfortable after being surprised by questions about Wintris. He later walks out of the interview altogether.
Members of Iceland's political opposition almost immediately called on the prime minister to step down, and thousands of protestors gathered outside the country's parliament on Monday afternoon to demonstrate against Gunnlagusson.
On Tuesday, Gunnlaugsson stepped aside as prime minister as a no-confidence vote in parliament loomed against him. The president's deputy minister Sigurdur Ingi Johannsson made the announcement, telling reporters that Gunnlaugsson's Progressive Party will suggest Johannsson take over as prime minister.
Other World Leaders Find Themselves Under Fire
There are a number of world leaders who are now on the defensive following the leak, though the possible political ramifications vary for each person.
In Ukraine, lawmakers from multiple parties called for an investigation into President Poroshenko's business dealings after the documents revealed he was the sole shareholder of an offshore company set up by Mossack Fonseca called Prime Asset Partners Limited. As the ICIJ details, Poroshenko had vowed to sell many of his assets in the lead up to Ukraine's election, but instead these were transferred to his offshore company. Prime Asset Partners Limited was also set up during the height of deadly fighting between Ukraine and Russian-backed separatists in 2014.
Poroshenko defended himself on Twitter on Monday, saying that he had delegated responsibility of assets to consulting and law firms once he became president. The president's spokesman said that Poroshenko adhered to Ukrainian law, according to The Guardian.
U.K. Prime Minister David Cameron also has a connection to the leak, as his late father, Ian, is implicated in running an offshore investment fund based in the Bahamas that avoided paying tax in the United Kingdom. The fund, Blairmore Holdings Inc, started in the 1980s and is listed in the documents as a client of Mossack Fonseca. British media -- including the BBC and The Guardian, which are part of the team of media outlets involved in the investigative reporting -- have delved into the allegations.
Pakistan's Prime Minister Nawaz Sharif has also been tied to the leak through his family, as it was revealed that three of his children have links to a number of offshore companies. On Monday, Sharif's son defended against allegations from opposition politicians that the family was hiding its money, saying that the businesses were legal.
Another leader not directly named in the documents but connected through close associates is Russia's President Putin, whose wealth has long been the subject of speculation. A series of financial transactions involving offshore accounts connected to Putin's friends Yuri Kovalchuk and Sergei Roldugin amount to around $2 billion.
What Happens Next?
The fallout from the Panama Papers is still occurring, but many regulatory bodies and governments have already pledged to investigate journalists' findings.
Britain's HM Revenue and Customs has said it will act "swiftly and appropriately" on the data, and requested access from ICIJ to the millions of documents that they obtained through the leak. Australia's tax office announced that it is investigating some 800 of the country's residents who were named in the leak. And French financial prosecutors have opened a preliminary investigation into tax fraud as a result of the documents.
Mossack Fonseca has denied any wrongdoing in the wake of the leak. Founder Ramon Fonseca told Reuters on Monday that the firm had suffered a "limited hack" and said they had notified clients.
This story has been updated to include information on the Icelandic prime minister stepping down.